Negative Sales Invoice for labour ??

[Dave2302 387]

No, scrub that, that doesn't work, so I'm still fucked if I know, will have to wait until Monday

[Screenman 47]

If you write out an invoice and it is not paid you may have to prove you did everything in your power to recover those funds.If you do not do this then VAT is payable and it will still show as income.

 

[Dave2302 387]

I'm not going that route, for that reason.

According to other sources, I write out a Sales Invoice to myself for 2 hours labour, plus battery FOC total = - £120 so I subtract £120 from my monthly sales total !!

Then cross reference it to the Credit from HMP for the original Battery and also cross reference it to my original Sales Invoice on 12/12/17.

That way I recover my 2 hours through the books, which now I've slept on it makes perfect sense.

[Mark101 536]

2 hours ago, Dave2302 said:

I'm not going that route, for that reason.

According to other sources, I write out a Sales Invoice to myself for 2 hours labour, plus battery FOC total = - £120 so I subtract £120 from my monthly sales total !!

Then cross reference it to the Credit from HMP for the original Battery and also cross reference it to my original Sales Invoice on 12/12/17.

That way I recover my 2 hours through the books, which now I've slept on it makes perfect sense.

£60 per hour is your charge out rate, not your cost rate.  I don’t think you can (in effect) charge what is consequential losses to yourself, plus there will not be any tangible evidence that you could have been earning retail money for those two hours.  Just my opinion and I know it is somewhat out of principal, I would be forgetting about it and moving on.

[Dave2302 387]

LOL, Mark I agree with you for 2 hours, but like I said, it was this Battery one that got me thinking and started all this shit ................

What if it was a lengthy Clutch DMF job like tho one I I did last week on the Expert Van, I would be wanting to claim a 9 hr job back from somewhere even if it was questioned in an audit and subsequently reduced to say £40 per hr .................................

Last night I phoned Elaine for a catch up, (she's the lady who used to do our Transmission firms books).

She said that used Car Warranty is totally different to Workshops own Warranty, used car is expected to be covered by 3rd party Warranty co, or funding from the profits.

This "negative Sales Invoice" is how she put for example, a 12 hour strip and rebuild Gearbox Warranty through back in those days, she even put the necessary Gaskets and Oil Seals etc through Purchase Invoices and marked as "Workshop" rather than "Reg Plate Number" for the original Rebuild parts ................. Suppliers don't warrant those for an internal part failure. She said that is how Engine recon Firms deal with Workshop Warranty works, I will have to wait and see now......................

I've just got to confirm with new Accountant up here to make sure HMRC haven't got wise and stopped it in more recent years  

I also saw the local Coach / Bus operator in the pub earlier today, he says he's still putting them through like that if need arises.

In all our years trading back then we had 2 or 3 big Tax audit / investigations and they never said a dicky bird about this, in fact the only thing they ever suggested was that my fuel bills were going in my power boats, because they saw one in the Car park one time, and asked who's it was !!

Dumb cunts lol, all company vehicles were Diesel, power boat ran on petrol, so our Accountant fucked them right off 

I just guess it's like all things Tax, if you are taking the piss you get slapped with the big stick

[tradegirl 112]

On 11/9/2018 at 5:36 PM, Nick M.K. said:

Which bit of money? The replacement battery was free. You can certainly claim the 88 business miles (around 54 pence per, have to doublecheck).

You buy a "Guildhall mileage log book", record these miles there and deduct the £50 or so as expenses.

https://www.ebay.co.uk/itm/Guildhall-Vehicle-Business-Mileage-Record-Log-Book-Ref-T43/150747245295?_trkparms=aid%3D555017%26algo%3DPL.CASSINI%26ao%3D1%26asc%3D55149%26meid%3D4e86ae68ea664a78867872be1be6b549%26pid%3D101006%26rk%3D1%26rkt%3D1%26%26itm%3D150747245295&_trksid=p2045573.c101006.m3226

Nick, isn't this the same as fuel expenses? Or is this on top of fuel receipts?

[BHM 994]

Dave, life’s too short. I’ll make it easy for you. Don’t f***ing bother, move on & forget about it. 

[David Ayers 171]

Trying to save 2 hours labour cost by spending 3 hours trying to do it and probably saving £2 in the end.

Congratulations Dave. You are now a true Scotsman!

[Dave2302 387]

1 hour ago, David Ayers said:

Trying to save 2 hours labour cost by spending 3 hours trying to do it and probably saving £2 in the end.

Congratulations Dave. You are now a true Scotsman!

Now the 2 hours was never the point was it !!

If you'd read the whole post you'd see I was more concerned to know the correct procedure ................ Just in case I get a warranty on a 9 hour Clutch & DMF job for example !!

I will not be putting the 2 hours through the books, but Accountant has since confirmed that a lot of businesses Invoice a negative amount in such circumstances, to use his words "It's like anything if you take the piss you'll eventually get grief" !!

The 2 hours is the longest, and only the 3rd warranty on parts fitted over 3 years now, none of which have been put through my books as a sales minus, so I do not qualify for taking the piss !!

If I get something lumpy like a Pug Expert Clutch, MB Heater Core or failed Replacement Engine etc then yeah, you can bet I will be putting it through !!

I now know the answer to my OP, so case closed IMHO 

[Nick M.K. 574]

4 hours ago, tradegirl said:

Nick, isn't this the same as fuel expenses? Or is this on top of fuel receipts?

Fuel receipts are one thing. It's like screenwash liquid or engine oil or tyre shine. Something that we put in/on the stock cars for sale and something we claim the VAT on. 

Mileage allowance is to allow for the business use of your personal car and your personal fuel (that you don't claim the vat on). 

[David Ayers 171]

I did read it all

On 09/11/2018 at 3:11 PM, Dave2302 said:

it's £££'s I'm not giving up to tax that way

 

On 09/11/2018 at 5:28 PM, Dave2302 said:

so I won't be paying tax on that bit of money in December 2019.

However all this invoicing yourself sounds too complicated for me.

Glad you got it sorted though.

[Mark101 536]

I see it as a consequence of business.

How many times have I given up time to help a customer when it turns out to be operator error (elec roof not working- reason = load partition cover not deployed).

I don't charge the customer and I don't imagine you would have Dave, if the battery wasn't at fault.  It's just a cost to the business although I do agree if you had to remove an engine and refit due to a parts failure but then I would be pursuing the engine (or part) supplier for reimbursment not messing with my very tidy books.  Just IMO.

[Screenman 47]

I am still trying to get my head around an invoice that you write out that will never be paid. Can I write out a negative invoice every time I look at a dent that cannot be repaired, or a screen crack too long.

 

 

[mike101 8]

I’ve never heard of a negative invoice - surely that’s just a credit note? 

 

 

 

[Dave2302 387]

FFS .............How many times , it has nothing to do with Vehicle Sales, only to a Tradesmans Labour Hours !!

It has nothing to do with Used Vehicle Warranty, Dents, Screen Cracks, Poop on Carpet, Harry Munk on Seat,  etc etc !!

For example a plumber might Claim back a few booked hours if he has to attend a Central Heating Boiler Failure he supplied whilst it is in Warranty....................

Example:-

On a Retail Workshop Customers Car, (NOT a Vehicle he had sold) ABC Motors fitted Discs and pads 3 months ago 1.5 hours.

Invoices Customer and gets paid.

3 months later they come back juddering, he gets new Discs and Pads off Factor FOC.

The Factor will not pay labour.

ABC Motors writes out a Sales Invoice exactly the same as the first one except the date & cross ref's it to the first one. Mark it in Red "Warranty". Put the Total £'s in red with a big red - (minus sign) in front of it.

At end of month he subtracts that figure from his Sales Total !!

How easy is that !!

I'm outta here

[Screenman 47]

So what you are saying is if you have to do the job twice then you do not pay tax on it? Just trying to get it clear so that we can all have a go.

[Arfur Dealy 823]

Dave, you either invoice for your time or do it free of charge, anything else is false accounting. 

[BHM 994]

41 minutes ago, Dave2302 said:

FFS .............How many times , it has nothing to do with Vehicle Sales, only to a Tradesmans Labour Hours !!

It has nothing to do with Used Vehicle Warranty, Dents, Screen Cracks, Poop on Carpet, Harry Munk on Seat,  etc etc !!

For example a plumber might Claim back a few booked hours if he has to attend a Central Heating Boiler Failure he supplied whilst it is in Warranty....................

Example:-

On a Retail Workshop Customers Car, (NOT a Vehicle he had sold) ABC Motors fitted Discs and pads 3 months ago 1.5 hours.

Invoices Customer and gets paid.

3 months later they come back juddering, he gets new Discs and Pads off Factor FOC.

The Factor will not pay labour.

ABC Motors writes out a Sales Invoice exactly the same as the first one except the date & cross ref's it to the first one. Mark it in Red "Warranty". Put the Total £'s in red with a big red - (minus sign) in front of it.

At end of month he subtracts that figure from his Sales Total !!

How easy is that !!

I'm outta here

Dave, I think you’ve answered your own question. I’s suggest if you’re bothered write yourself the invoice then forget about it. 

[Dave2302 387]

5 minutes ago, BHM said:

I think you’ve answered your own question. I’s suggest if you’re bothered write yourself the invoice then forget about it. 

Exactly, thank you.

My original question was how to do it, the answer was provided from other sources including my Accountant.

Now I know how to do it, Question is answered.

Had he been away somewhere, and / or used some other garage to replace the Battery, then I would have refunded him my original Labour charge and my marked up Battery price, and my Factor would have refunded me the returned Battery Cost.

Now I really have finished 

[trade vet 704]

This all sounds like ‘Enron’ accounting to me.You have to be carefull,even if your accountant allows you to account for unpaid labour in a certain way,an HMRC inspector may interpret it differently and disallow it with a vengeance.It is with mistakes like this that HMRC possibly via a VAT inspection could give them reason to start an enquiry....Anyone on here had one of them ?

[Dave2302 387]

Enron was the exact opposite they were hiding losses by entering estimated figures. Also USA, different systems altogether.

HMRC cannot disallow an amount if a business can justify it.

If you take the piss and cannot justify it, then you can and probably will get slaughtered.

[Stalker 180]

I'm not an accountant, however i think i know what Dave means.

It could show in the annual accounts as lost income/warranty claims, however there would be no real winner. It would only really benefit Dave to see where he may be losing a little income / allocating time.

 

 

 

[Mark101 536]

I think it is what it is.  Your contract (and therefore beef) is with the factor, you agreed to parts only warranty (or at least that's all they offer and you proceeded to use and so by default accept that principle - same regardless of what it is, engine, battery you name it).